We assessed the diagnostic accuracy of the German version of the Addenbrooke's Cognitive Examination (ACE) in identifying early Alzheimer's disease (AD) and mild vascular dementia (VaD) in comparison with the conventional Mini-Mental State Examination (MMSE). The study refers to 50 patients with mild dementia of AD, 26 patients with mild dementia of vascular etiology and to 54 cognitively normal subjects. The ACE and MMSE were validated against an expert diagnosis based on a comprehensive diagnostic workup. Statistical analysis was performed using the receiver operator characteristics method. The optimal cut-off score for the ACE for detecting dementia in patients with early AD was 85/86, which had a sensitivity of 93% and a specificity of 86%. The optimal cut-off for the ACE for the identification of dementia in patients with mild VaD was also 85/86 and it had a sensitivity of 93% and a specificity of 100%. The kappa values imply a substantial agreement between the diagnoses made by the ACE and the MMSE. The German version of the ACE is a short and practical but accurate test battery for the identification of AD and VaD, assessing a broad range of cognitive functions and providing a wide profile of cognitive functions/dysfunctions.